An increase in a perfectly competitive firm’s demand for labor could be caused by
A) a decrease in the market wage rate.
B) an increase in the amount of human capital among the labor force.
C) an increase in the supply of labor.
D) a decrease in the market price of the product the firm produces.
In 2013, the dividend yield on Abercrombie & Fitch (ANF) stock rose from a low of
1.33% in May to 2.24% in October. Which of the following would have generated that
result?
A) The closing price of ANF stock rose.
B) ANF announced an increase in the dividend it would pay per share.
C) The price-earnings ratio fell.
D) ANF issued bonds with a coupon rate equal to 2.24%.
If there is a change in the ability of a firm to produce a given level of output with a
given level of inputs, we say there is
A) human capital investment.
B) technological change.
C) an increase in labor productivity.
D) a movement along a given per-worker production function.
What are property rights?
A) the title to ownership of any physical asset
B) a legal document verifying ownership of intangible assets
C) the rights individuals or firms have to the exclusive use of their property, including
the right to buy or sell it
D) the right of the government to appropriate private assets for the good of society
Table 6-7
The town of Bloomfield is well known for its basketball team. The price of basketball
game tickets is determined by market forces. Table 6-7 above shows the demand and
supply schedules for basketball games tickets.
What is the most distinctive feature of the supply curve?
A) The supply curve is perfectly inelastic.
B) The supply curve is horizontal.
C) The supply curve is upward sloping.
D) The supply curve is perfectly elastic.
Expansionary monetary policy will have what effect on the components of aggregate
demand?
A) Consumption, investment, and net exports will rise.
B) Consumption and investment will rise, but net exports will fall.
C) Consumption will rise, but investment and net exports will fall.
D) Consumption will fall, but investment and net exports will rise.
Figure 11-2
Short-run output is maximized at
A) L1.
B) L2.
C) L3.
D) insufficient information to determine
Table 14-4 Alistair Luggage
and Baine Baggage are the only firms selling luggage in the upscale town of Montecito.
Each firm must decide on whether to increase its advertising spending to compete for
customers. If one firm increases its advertising budget but the other does not, then the
firm with the higher advertising budget will increase its profit. Table 14-4 shows the
payoff matrix for this advertising game.
Does Alistair have a dominant strategy and if so, what is it?
A) Yes, Alistair should increase its advertising budget.
B) Yes, Alistair should keep its advertising budget as is.
C) There are two dominant strategies: If Baine increases its advertising budget, then
Alistair’s best bet is to keep its budget the same, but if Baine does not increase its
spending, then Alistair should raise its advertising budget.
D) No, there is no dominant strategy.
If consumers decide to be more frugal and save more out of their income, then this will
cause
A) a shift in the supply curve for loanable funds to the right.
B) a shift in the supply curve for loanable funds to the left.
C) a movement to the right along the supply curve for loanable funds.
D) a movement to the left along the supply curve for loanable funds.
Which factors explain labor productivity?
A) technological change; the quantity of labor per hour worked
B) diminishing returns; the quantity of labor per hour worked
C) diminishing returns; the quantity of capital per hour worked
D) technological change; the quantity of capital per hour worked
For consumers who opt to pay a $10 monthly fee to have unlimited texting on their cell
phones, but choose not to pay a $5 monthly fee to have unlimited call minutes, the
unlimited texting option has a ________ than the unlimited minutes option.
A) higher price elasticity of demand
B) higher cross-price elasticity of demand
C) lower price elasticity of demand
D) lower cross-price elasticity of demand
Assume there is a shortage in the market for digital music players. Which of the
following statements correctly describes this situation?
A) The demand for digital music players is greater than the supply of digital music
players.
B) Some consumers will be unable to obtain digital music players at the market price
and will have an incentive to offer to buy the product at a higher price.
C) The price of digital music players will rise in response to the shortage; as the price
rises the quantity demanded will increase and the quantity supplied will decrease.
D) the shortage will cause an increase in the equilibrium price of digital music players.
Figure 2-4 Figure 2-4 shows
various points on three different production possibilities frontiers for a nation. A
movement from ________ could occur because of additional government restrictions
toward allowing immigrant labor.
A) X to W
B) Y to X
C) V to W
D) W to X
Lionel’s Lawn Care is a company that maintains residential yards. Lionel’s cost for his
standard package of mowing, edging, and trimming is $15, and he charges $25 for this
service. For a total price of $40, Lionel will also trim shrubs, a service that adds an
additional $10 to the total cost of the standard package. What is Lionel’s marginal
benefit if he sells the standard package?
A) $10
B) $15
C) $25
D) $40
At market equilibrium,
A) demand equals supply.
B) quantity demanded equals quantity supplied.
C) surpluses are greater than shortages.
D) shortages are greater than surpluses.
Table 2-11
Table 2-11 shows the number of labor hours required to produce a motorcycle and a
guitar in Ireland and Scotland.
What is Ireland’s opportunity cost of producing one motorcycle?
A) 0.2 guitar
B) 5 guitars
C) 8 guitars
D) 32 guitars
When the marginal product of labor rises
A) the marginal cost of production will exceed the average total cost.
B) the marginal cost of production also rises.
C) the marginal cost of production falls.
D) the average total cost of production also rises.
One way investment banks differ from commercial banks is that investment banks
A) lend exclusively to households.
B) do not take in deposits.
C) only buy and sell mortgages.
D) trade only in foreign exchange markets.
On the long-run aggregate supply curve,
A) a decrease in the price level decreases the level of potential GDP.
B) a decrease in the price level increases the aggregate quantity of GDP supplied.
C) a decrease in the price level decreases the aggregate quantity of GDP supplied.
D) a decrease in the price level has no effect on the aggregate quantity of GDP supplied.